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In 1740, the imperial nobleman Mattia Giuseppe Cresseri de Breitenstein of Trento borrowed 25,000 florins (125,000 Venetian lire) in a single transaction (Archivio di Stato di Trento, hereafter Astn, Archivio notarile, hereafter An, A. Ceschini folder, hereafter f., XVIII, 4388, 21 March 1740. 1 florin was worth 5 lire (or troni). 1 lira was equal to 20 soldi or to 240 denari). That nearly equaled the revenues of the tolls of Rovereto in the same year, 24,769 florins (Bonoldi, La fiera e il dazio. Economia e politica commerciale nel Tirolo del secondo Settecento. Società di studi trentini di scienze storiche, Trento, p. 67, 1999). The nobleman Leonardo Piomarta de Langenfeld, in one year (1760), lent more than 45,000 florins (225,000 lire) spread across a score of transactions, most to finance the surrounding rural communities and some as individual loans. These figures represent only a small portion of the sizable amount of capital mobilized by the informal credit market pivoted on notaries, at a time when banks did not yet exist. For years, a vast literature claimed that a country's economic development became possible only once banks, in the form of joint-stock companies, had been created (Cameron, Financing industrialization. Elgar, Aldershot, 1972). According to this view, which became common wisdom, only specialized formal credit institutions were able-acting as financial intermediaries-to mobilize considerable financial resources at low cost. As a consequence, preindustrial economies had been for long considered limited, characterized by a weak demand and by money exchanges that occurred within restricted personal relationships. On the whole, credit supply had been considered aimed at meeting only military expenses or at financing the growing bureaucratic apparatus of modern State [Debunking this traditional view, recent studies have proved the positive interplay between public debt and real economy in pre-industrial Italy where, in some cases, state bonds nurtured a lively financial market (De Luca, Government debt and financial markets: exploring pro-cycle effects in Northern Italy during the sixteenth and the seventeenth centuries. In: Piola Caselli F (ed) Government debts and financial markets in Europe.
In 1740, the imperial nobleman Mattia Giuseppe Cresseri de Breitenstein of Trento borrowed 25,000 florins (125,000 Venetian lire) in a single transaction (Archivio di Stato di Trento, hereafter Astn, Archivio notarile, hereafter An, A. Ceschini folder, hereafter f., XVIII, 4388, 21 March 1740. 1 florin was worth 5 lire (or troni). 1 lira was equal to 20 soldi or to 240 denari). That nearly equaled the revenues of the tolls of Rovereto in the same year, 24,769 florins (Bonoldi, La fiera e il dazio. Economia e politica commerciale nel Tirolo del secondo Settecento. Società di studi trentini di scienze storiche, Trento, p. 67, 1999). The nobleman Leonardo Piomarta de Langenfeld, in one year (1760), lent more than 45,000 florins (225,000 lire) spread across a score of transactions, most to finance the surrounding rural communities and some as individual loans. These figures represent only a small portion of the sizable amount of capital mobilized by the informal credit market pivoted on notaries, at a time when banks did not yet exist. For years, a vast literature claimed that a country's economic development became possible only once banks, in the form of joint-stock companies, had been created (Cameron, Financing industrialization. Elgar, Aldershot, 1972). According to this view, which became common wisdom, only specialized formal credit institutions were able-acting as financial intermediaries-to mobilize considerable financial resources at low cost. As a consequence, preindustrial economies had been for long considered limited, characterized by a weak demand and by money exchanges that occurred within restricted personal relationships. On the whole, credit supply had been considered aimed at meeting only military expenses or at financing the growing bureaucratic apparatus of modern State [Debunking this traditional view, recent studies have proved the positive interplay between public debt and real economy in pre-industrial Italy where, in some cases, state bonds nurtured a lively financial market (De Luca, Government debt and financial markets: exploring pro-cycle effects in Northern Italy during the sixteenth and the seventeenth centuries. In: Piola Caselli F (ed) Government debts and financial markets in Europe.
This article presents archival data on rebuilding costs and interest rates from the Corporation of London, 1666-83, to analyse how, in the absence of banking or capital market finance, the London Corporation funded the rebuilding of London after the Great Fire. The City borrowed from its citizens and outside investors at rates much lower than previously thought to replace vital services and to support large improvement works. Lenders were reassured by the Corporation's reputation, and its borrowing was partly secured by future coal tax receipts. The records show that funding from these sources was forthcoming and would have covered the costs. Most of the rebuilding was completed in less than a decade; but having invested in public goods without generating the expected flows of income in the form of improved fees, fines, and rents, the City defaulted in 1683. K E Y W O R D Scredible commitment, early modern finance, financial development, Great Fire of London, interest rate, municipal debt By 1666 London was as large outside the walls as it was within. When the Great Fire of London burned for a week and consumed almost the entire area of the old City, including the main public buildings, wharves, 87 parish churches, and St Paul's Cathedral, there were few deaths. Reportedly, more than 13 000 houses burnt down, and some 70 000 people were displaced. 1 Although the crisis created unprecedented challenges for the country as well as for the Corporation of London, the displacement and disaster relief were managed within the capability of 1 Strype, Survey of the cities. All subsequent quotations and estimates, including that of Brett-James, Growth of Stuart London, come from Strype, but it should be noted that all estimates of financial sums are calculated in rents, not in building costs.
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